Wilmar Oleo Pte Ltd v Vinmar Chemicals and Polymers BV (Rev 1)

A contract may be binding on agreed core terms while leaving other terms for later agreement. A party’s later draft contract does not become part of the agreement merely because the other party fails to sign or object, particularly where it was presented for signature as containing the complete terms.

A course of dealing implies a contractual term only where the term was consistently included in earlier contracts, or the parties consistently conducted themselves as though it applied. Practical agreement on an inspector in individual transactions does not itself establish such a term.

Where a contract makes a mutually agreed surveyor’s findings binding, conduct objectively demonstrating acceptance may amount to agreement. On the evidence, the cargo met the contractual water specification and the buyer’s contrary survey result did not establish otherwise.

Wilmar agreed to sell Vinmar three monthly shipments of biofuel on an FOB ARA basis. A dispute concerned the January 2009 shipment, for which Vinmar nominated a vessel and Wilmar supplied a certificate from Saybolt showing water content within the contractual maximum.

Vinmar relied on a later SGS test showing water content above the limit. It contended that the parties’ contract included terms requiring mutual agreement of the load-port inspector, making that inspector’s findings final and binding, and that Wilmar had breached or repudiated the January shipment obligations.

The court had to determine the contractual terms, whether a course of dealing incorporated the asserted inspection provisions, whether Saybolt or SGS had contractual authority, and whether the cargo was off specification. The claim was for damages arising from Vinmar’s refusal to take the January shipment.

1. Contractual terms. The parties had agreed the core terms of price, quantity and shipment period. Wilmar’s later contract form was plainly presented as the complete contract and for signature. Vinmar’s failure to sign or object did not amount to acceptance. The parties therefore had not agreed the additional inspection provisions in that form.
2. Course of dealing. The previous transactions did not establish a consistent contractual term requiring mutual agreement of the inspector or making that inspector’s findings binding. Earlier transactions either contained express inspection provisions or differed materially. The court distinguished the practical performance of past contracts from the terms objectively agreed in them.
3. Inspector and certificate. Although no binding inspection term formed part of the contract, the court held that, if such a term had existed, the Saybolt certificate would have constituted the mutually agreed determination. Vinmar’s conduct, including its dealings through Ms Sarwanto, objectively demonstrated agreement to Saybolt. SGS C04 did not bind the parties.
4. Water content. Vinmar bore the burden of proving that the cargo exceeded 400 ppm. Under EN 12937, testing uncertainty meant that the SGS result of 435 ppm did not, standing alone, establish that proposition. Averaging uncertain readings and back-calculating from a later hand-blend did not cure that evidential difficulty. Four of five relevant readings were at or below 400 ppm, enabling the court to conclude on the balance of probabilities that the cargo complied.
5. Disposition. The claim succeeded. The court left questions concerning time being of the essence, re-tender, and repudiation for determination in a case where they would be decisive.